A total of 149 companies currently enjoying pioneer status incentives will retain their tax holidays for at least two more years, despite Nigeria’s transition to a new tax regime scheduled to take effect from January 2026, the Federal Government has said.

The Nigerian Investment Promotion Commission disclosed this on Thursday during a media parley in Abuja, noting that the existing beneficiaries would be protected under transitional provisions of the new tax framework.

Data presented by the commission showed that the Pioneer Status Incentive has attracted total capital investments of about N8.7tn since its inception in 2017, while supporting the creation of 58,897 direct jobs, largely in manufacturing and Lagos State.

A breakdown of the incentive administration revealed that out of 693 applications received between 2017 and the second quarter of 2025, 304 were granted, 64 were denied, while only one certificate was cancelled, leaving 149 firms as current beneficiaries.

With the retention of the existing beneficiaries, the companies will continue to enjoy tax exemptions for a minimum period of two years, following a directive not to scrap the incentive for firms already granted pioneer status.

This was disclosed by the Chairman of the Presidential Tax Reform Committee, Taiwo Oyedele, who said the decision was aimed at protecting investor confidence and ensuring a smooth transition to the new tax regime.

Speaking during the presentation at the event, an official of the Incentives Administration Division, Uchenna Okonkwo, explained that the pioneer incentive, which grants full corporate income tax relief for three years, extendable by two years, would be phased out gradually.

“So, if you look at this summary table for 2017 to second quarter 2025 pioneer status incentive, you can see total PSI grant request is 304, like I stated in that summary sheet. Application denied is 64, PSI certificate cancelled is one and current beneficiaries is 164.”

The pioneer status is an incentive offered by the Federal Government, which exempts companies from paying income tax for a certain period. This tax exemption can be full or partial.

Offered under the Industrial Development Income Tax Act with tax reliefs for a three-year period, the incentive is generally regarded as an industrial measure aimed at stimulating investments in the economy. The products or companies eligible for this pioneer status are those that do not already exist in the country.

However, the incentives have been a contentious issue due to the high amount of revenue lost to waivers granted every year. The special tax exclusion has reportedly cost the government an estimated N8tn in lost revenue annually.

But going forward, the NIPC official said the PSI would transition into the Economic Development Incentive, a tax credit-based system introduced under the new tax law, designed to promote long-term investment, capital reinvestment and sector-specific growth.

Under the new framework, companies will pay taxes but enjoy credits tied to capital expenditure thresholds, with some firms potentially benefiting from tax reliefs and credits for up to 15 years, depending on reinvestment performance.

Earlier in her address, the Executive Secretary and Chief Executive Officer of the NIPC, Aisha Rimi, said the commission facilitated over $10bn in investment commitments in 2025, reflecting growing investor confidence in Nigeria’s reform agenda.

Rimi, who was represented by the Director of Strategic Services, Abubakar Yerima, disclosed that capital importation rose sharply to $5.2bn in the first quarter of 2025, up from $3.4bn recorded in the same period of 2024.

She added that total inflows in the first half of the year reached $10.23bn, driven by investments in manufacturing, ICT, agro-processing, renewable energy and services. According to her, the commission facilitated the incorporation of nearly 100 companies, processed hundreds of investor inquiries, approved expatriate quotas and strengthened its One-Stop Investment Centre to improve ease of doing business.

Rimi said that in the second quarter alone, 17 companies were granted pioneer status, mobilising about $809.57m in capital investments and creating over 3,000 direct jobs, while additional approvals in the third quarter generated more than 2,400 jobs.

Commenting, the Chairman of the Commerce and Industry Correspondents Association of Nigeria, Ifeanyi Onuba, commended the commission for deepening engagement with the media, describing accurate reporting as critical to investor confidence and economic growth. (The PUNCH)

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